Here’s how much cash you should keep in your portfolio, according to experts

Michelle Fox | CNBC | December 10th, 2025

Attractive yields have drawn investors to cash, but with rates declining, they should consider how much they really want stashed in those accounts.

Calculate emergency needs

The general rule of thumb is to have enough liquidity to cover three to six months of living expenses in case of emergency.

However, you may want more cash depending on your situation and the current environment. For instance, unemployed Americans in September were out of work for an average of 24 weeks, according to the Bureau of Labor Statistics.

“I would maybe be cautious in this type of an environment and give yourself seven months to find that next job,” said certified financial planner Sam Huszczo, founder of SGH Wealth Management in Lathrup Village, Michigan.

A sleeve of cash in portfolios

Beyond emergency savings, cash can sometimes take a more strategic role in investment portfolios. For instance, noted investor Dan Niles recently called cash his best investment idea.

However, goals-based investors should not be trying to time the market by having a large amount of liquidity ready to deploy during market dips, Huszczo said.

Huszczo doesn’t think it makes sense to hold cash in an investment portfolio. Those with excess cash may consider locking in rates on investment-grade corporate bonds while they are still solid, he said. He typically recommends a 10-year ladder, which he said still offers about a 4.46% yield to maturity.

“That’s something that will help people try to fight against inflation, or at least do a better job than cash,” Huszczo said.